The Edsa company wishes to finance an expansion program through the issue of new shares. Accordingly, it offers its shareholders the opportunity to subscribe to new shares at P135 up to 50% of their holdings. The value of each share on June 1 is P150. The share goes ex-rights on the market on June 2. Mendiola corp. owns 2,000 shares of Edsa company acquired at a cost of P132,000. The shares are measured at fair value through other comprehensive income. Compute for the following: a. Theoretical Market value of a right b. Total cost of the stock rights received c. gain of loss on sale of stock rights, assuming that Mendiola sold 1000 of the rights at P5.50 each
